WWI and the London Insurance Market

During WWI, everyone was called on to play their part in the war effort. The London insurance market was no exception.

The market’s strong connections with the Territorial Army meant that hundreds of underwriters, brokers, members and staff were mobilised within weeks of war being declared on 4 August 1914. Most of them joined the County of London Regiment, either the 5th Battalion (known as the London Rifle Brigade) or the 14th Battalion (known as the London Scottish). By June 1916, when compulsory military service was introduced, 2485 men from Lloyd’s alone had undertaken military service.

Insurance companies and brokers also provided thousands of volunteers in the early months of the war. Among the first to reveal their numbers in the autumn of 1914 were the Liverpool and London and Globe Insurance Company, which said of the 240 clerks in the London district, 90 had left for active service; the directors of Alliance Assurance had granted leave of absence for 20% of staff; the Commercial Union Assurance Company for 687 members (Source: Post Magazine)

The Territorial Army had been established for home defence but all the regiments volunteered for active service and were quickly sent to the Western Front with the first Lloyd’s casualties being recorded at the end of October 1914 at the Battle of Messines.

As the war progressed, the casualties quickly mounted and many hundreds of those who served or were later enlisted never returned. The list of those commemorated on the war memorial at Lloyd’s contains members of the famous family firms that dominated the London insurance market at the outbreak of war – Willis, Poland, Tyser, Walsham – as well as members of staff such as Caller Peter Emslie who was decorated and killed in action on 23 August 1918. Many wealthy members of Lloyd’s also enlisted in their local regiments and their names are also recorded on the Lloyd’s War Memorial.

The worst day of the war – in common with many towns, institutions and other communities – was 1 July 1916, the first day of the Battle of the Somme when nine men from Lloyd’s were among the 19,240 British soldiers who fell on that awful day.

Despite the numbers of men from Lloyd’s who committed themselves to the war effort, the insurance business continued and supported the war effort.
The Great War saw the introduction of new weaponry and technology, such as submarines, airships and planes, which presented new challenges when assessing risks at sea, in the air and on land.

By 1914 there was a widespread fear of attack from the air using Zeppelin airships and Lloyd’s was quick to respond to this threat by providing specialist cover.

The first policy for “Damage by missiles from hostile aircraft” was placed in September 1914 by brokers Bray, Gibb and Co with Cuthbert Heath as the lead underwriter. It was for Threadneedle House in Bishopsgate for £50,000 (approx. £5m at 2014 prices). Threadneedle House survived both WW1 and WW2 before finally succumbing to the developers in the mid-1970s.

Lloyd’s and the specialist insurers based in London’s EC district represented the world’s leading marine insurance market at the outbreak of the First World War. The recent experience marine underwriters had of war risks made them very nervous of the threat to merchant shipping. The invention of the submarine and the propelled torpedo towards the end of the 19th century had greatly increased the potential losses and after 1898 war risks were no longer included automatically in marine insurance policies.

The severe losses inflicted by torpedoes during the Russo-Japanese War of 1904-05 just enhanced the fears of underwriters so that by 1914 only the mutual insurance clubs, many based in London, were writing hull war risks, although cargoes were still covered in Lloyd’s.

The government was fully aware of the potential for the lack of insurance to be a major problem so on 5 August 1914, the day after war was declared and the day of the first marine loss - the Craigforth, carrying a cargo of wheat, which struck a Turkish mine in the Bosphorus and had to beach itself – it set up the State Insurance Office to insure 80% of hull war risks with the mutuals picking up the rest.

The insurance market’s contribution to the war did not only come from its workforce and the provision of insurance; vast sums of money were donated to assist the war effort with Lloyd’s alone making substantial contributions:

Over £100,000 was given to the Red Cross Societies.
£46,000 was donated to assist the Young Men’s Christian Association with the provision of canteens and huts.
£115,000 was contributed to the Committee of Lloyd’s Patriotic Fund (link) to help the relatives of soldiers and sailors.
Ambulances, costing £38,500, were given to the French forces at the time of the heroic defence of Verdun in early 1916.
The support for the armed forces continues today with the Worshipful Company of Insurers raising several thousand pounds for services causes such as Help4Heroes.

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